Position Papers

The Australian Water Association Position Papers can be found below.

The case for water efficiency

Synopsis

Water efficiency is an economically viable way to enhance water security in many circumstances. Water efficiency also makes sense in its own right and is worthwhile even when water security is not a goal; water efficiency can increase the availability of water for environmental, economic, cultural, spiritual and aesthetic purposes.

Australia’s climate is highly variable and emerging pressures such as population growth will affect the security of water supplies in ways that are difficult to predict. A changing climate will exacerbate these pressures. Flexibility is required to deliver effective solutions, and opportunities to achieve greater water efficiency must always be part of these solutions.

Water efficiency must be considered equally with supply-side options in the development of any strategy to improve long term water supply security.

In line with the 1994 COAG Water Reform Framework and the National Water Initiative, all costs associated with water supply should be internalised. This would facilitate comparison of demand and supply-side water security options.

Calculation of the benefits of water efficiency and of options to improve supply should not just include those items that are easily monetarised. The community holds strong views about other values that can be realised through water efficiency. Such values must always be taken into account in any comparison of alternatives.

Greater consistency in approaches taken to water efficiency across the country would facilitate the sharing of experiences and would minimise the risk of research being duplicated.

Skills, knowledge and practices in delivering water efficiency need to be maintained during times of plentiful rainfall.

Management of Biosolids in Australia

Synopsis

Biosolids is a safe and potentially useful soil-like material that has relatively high nutrient value and soil enhancement characteristics.

Inorganic sources of phosphorus and essential macro-nutrients are declining globally and prices are likely to rise in future. Use of biosolids represents a closing of the nutrient cycle, returning nutrients to the land from which they were derived.

Research by the Australian and New Zealand Biosolids Partnership has suggested that the community is generally supportive of the use of biosolids.

Australia has some of the strictest regulations and guidelines to control the use of biosolids, significantly stricter than those that apply in the EU or the United States. The multi-barrier approach that is characteristic of these regulations ensures that biosolids are safe for the use for which they are intended.

While Australian regulations are strict, unnecessary inconsistencies exist between the various states and territories and the Commonwealth. There are strong grounds for a review of regulations to reduce inconsistencies, while maintaining the effectiveness of regulations in protection of community and environmental health and wellbeing.

Cost reflective pricing

Synopsis

In line with the 1994 COAG water reforms, the water industry sets prices to cover the full cost of service provision. This has rationalized water use and made the industry substantially more commercial in its outlook.

There are further improvements that could be made, particularly with regard to the internalisation of externalities in price and investigation of the value of scarcity pricing in times of drought.

There are also a number of circumstances emerging that may inhibit the industry’s ability to ensure that prices set are cost-reflective. Caution needs to be exercised to ensure that these circumstances are mitigated.

Inter-basin delivery of water

Inter-basin delivery of water refers to the process of moving water from a source basin (catchment) to a recipient basin.

The approach has been controversial at times because of both perceived and actual impacts on the source basin and the receiving basin.

There are examples of negative impacts arising from schemes in this country and overseas.

Rigorous controls and assessment processes are available for determining how Inter-basin deliveries can be achieved sustainably. These need to be applied meticulously in determining when and how inter-basin delivery can occur.

The Australian Water Association believes that inter-basin deliveries are a legitimate means of accessing water, and should be considered equally with all alternatives, including non-supply options such as demand management and water conservation. If well researched, planned, implemented, monitored and adapted in response to unforeseen issues, inter-basin delivery can be a successful water supply strategy.

Governance

Synopsis

A number of States and Territories, and the Federal Government, are actively considering further reform of the Australian Water Industry

The Australian Water Association believes that improvements can be made, but that all proposals should be carefully considered to ensure that industry efficiency is maintained and that established frameworks which provide certainty to the industry are not weakened

The Australian Water Association further believes that the Federal Government should convene an appropriate national forum of all jurisdictions to consider the practicality of the reforms under consideration.

Rationalisation of subsidies and cross-subsidies

Synopsis

The 1994 COAG Water Reform Framework entrenched the principle of full cost recovery for urban water services and the elimination of cross-subsidies. The Framework further stated that where cross-subsidies are needed to achieve particular social outcomes, they must be made transparent.

Much has been done to reduce or make explicit subsidies and cross-subsidies within the water industry in line with this Framework.

Despite these achievements, in a number of categories subsidies and cross-subsidies persist or remain hidden. Their existence distorts the market for water and lead to inefficiencies.

The Australian Water Association believes that effort needs to be directed to minimising these cross-subsidies and avoiding the emergence of new subsidies and cross-subsidies in future.

Preparation for climate change

The water industry is potentially significantly affected by climate change. Supply security may decline and there will be costs associated with adaptation to a climate change future

Investment in research to make climate change projects more certain will be of great value, as will investigation of means by which the industry can adapt to climate change

The Australian Water Association has a role in disseminating the results of this research and also in encouraging commitment to further research by governments.

Precipitous decisions to invest in additional supply-side options (e.g. new dams, desalination) should be resisted. Decisions on new water supply options should only be taken in light of results of climate change-related research

Separation of utility functions from local governments

Synopsis

Smaller water authorities, particularly those run by local governments, are not as competitive as larger authorities and may not be as well positioned as those authorities to capitalise on economies-of-scale.

Costs to consumers in areas served by smaller utilities may not be as economically efficient as those delivered through larger utilities.

The skills base of smaller authorities may not be robust, a situation likely to be exacerbated by the emerging skills shortage in the water industry and the smaller authorities’ lesser capacity to bid for the services of those skilled practitioners who are available.

Governance arrangements surrounding water utilities owned by local governments may be weaker than those surrounding larger, more regularly scrutinised authorities.

There is a case for examining the future viability of smaller authorities, particularly those operated by local governments